Midea Plans to Fully Acquire Equity of Germany’s KUKA
On Tuesday night, Midea Group announced through the Shenzhen Stock Exchange that it plans to fully acquire the equity of KUKA Aktiengesellschaft (“KUKA” or “Kuka”), a company listed on the Frankfurt Stock Exchange in Germany. The move will be done through Midea Group’s wholly-owned subsidiary will result int he privatization of KUKA. The company did not disclose the specific price or time.
According to the announcement, after the completion of this acquisition, Kuka will become an overseas subsidiary wholly controlled by Midea and be delisted from the Frankfurt Stock Exchange. This acquisition will help Kuka focus on business operations and enhance the coordination of internal resources in robotics and automation-related business fields.
Previously, Midea Group had made an announcement about the agreement of both parties when first launching the acquisition offer in 2016. At that time, Midea did not sign a control agreement with Kuka Group to promote the delisting of the latter company nor did Midea have any plan to reorganize Kuka Group. Further, going forward, Midea will support the independence of the Kuka Board of Supervisors and the Executive Management Committee. Finally,Midea will not change the current number of employees, nor will it close any of the manufacturing bases or carry out any relocation of the business. The agreement lasts for seven years and will expire at the beginning of 2024.
In the announcement on November 23, Midea also stated that the acquisition has to go through certain filing and approval procedures according to relevant laws and regulations at home and abroad. Some uncertainties remain.
Kuka, which was founded in Germany in 1898, is a world-famous robot manufacturer. Together with ABB of Switzerland, FANUC and Yaskawa of Japan, Kuka is known as one of the “Top Four Robot Companies in the world”. Kuka’s industrial robots are used primarily in automobile manufacturing and in the medical industry.
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The case, namely Midea Group’s acquisition of Kuka, was a heated topic. Midea has become the second shareholder of Kuka through market transactions since 2015, holding 13.51% of the company. In 2016, Midea launched an acquisition offer to Kuka and completed it in January 2017. The biggest difficulty of the cross-border M&A is the supervision and anti-monopoly review in many countries. Midea finally completed it within half of a year, spending nearly 30 billion yuan ($4.69 billion) to do so and ended up with a 94.55% stake of Kuka. The deal is one of the largest overseas M&A cases in China.
Midea has achieved a leading position in the field of traditional household appliances in China, and the acquisition of Kuka provides new business growth and diversified development for Midea’s 2B business.